Bob Strickland – Director, IR John Stumpf – Chairman, President and CEO Howard Atkins – Senior EVP & CFO

Matt O'Connor – Deutsche Bank Securities Nancy Bush – NAB Research Betsy Graseck – Morgan Stanley Paul Miller – FBR Capital Markets Andrew Marquardt – Macquarie Research Equities Ron Mandel [ph] John McDonald – Sanford Bernstein Joe Morford – RBC Capital Markets

Good morning. My name is Celeste and I will be your conference operator today. At this time, I would like to welcome everyone to the Wells Fargo fourth quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Thank you. I would now like to turn today’s call over to Mr. Bob Strickland. Please go ahead, sir.

Good morning. This is Bob Strickland, Director of Investor Relations at Wells Fargo. Thank you for joining us on our call today where John Stumpf and Howard Atkins will review fourth quarter and full year 2009 results and answer your questions. Before we get started, I would like to remind you that our fourth quarter earnings release and financial supplements are available on our website. I’d also like to caution you that we may make forward-looking statements during today’s call and that those forward-looking statements are subject to risks and uncertainties. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including the Form 8-K filed today and the earnings release and financial supplement included as exhibits. In addition, some of the discussion today about the company’s performance will include references to non-GAAP financial measures. Information about those measures, including a reconciliation of those measures to GAAP measures, can be found in our SEC filings and in the earnings release and financial supplement available on our website at wellsfargo.com. I will now turn the call over to the Chairman and CEO, John Stumpf.

Thanks, Bob, and thanks to everyone who has joined us this morning on this call. We appreciate your interest in Wells Fargo and look forward to reviewing our results and answering your questions. First, let me say how proud I am of all the dedicated Wells Fargo team members across the nation who put forth tremendous effort to help us achieve strong results throughout the year. In my 28 years at Wells Fargo, I believe 2009 was the best year we ever had in terms of positioning us for the future growth. Looking back at where we were last year at this time, I believe our business is better in virtually every aspect. We generated record earnings, strengthened our balance sheet, and removed a great deal of risk from our businesses. We generated significant capital, both internally and externally, ending the year with capital ratios higher than they were before we completed the Wachovia merger. I couldn’t feel better about the opportunities ahead. With a company that is twice the size it was in 2008, we see tremendous opportunity ahead as we continue to integrate our two companies. The merger with Wachovia is exceeding all of our expectations in terms of expense savings, successfully meeting integration milestones, the quality of our team members and customers, and the opportunities we see together going forward. Now to be sure, we’ve had – we’ve all had to manage through a lot of change and uncertainty over the past year. While the economy is starting to show some signs, positive signs, and pockets of stability, the unemployment rate is still too high and housing price improvement continues to be spotty. No doubt, there will be surprises ahead. But the business model that has served Wells Fargo well for over two decades, focus on diversification and satisfying all of our customers’ financial needs continues to serve us well in the current environment and will guide us through 2010 and beyond. In fact, if you liked Wells Fargo in the past, you should love us today. As a result of the merger with Wachovia, our business model is even stronger. We have more geographic diversity and twice the number of customers who we can better serve with a more diverse and powerful set of products. We are more balanced between fee income and interest income and between commercial and consumer businesses. And while we have gained much with our merger with Wachovia, much has remained the same. We have the same strong management team, I believe the best in the business, made even better with the addition of Wachovia team members who remain focused on providing exceptional customer service. We have the same culture and singular focus on helping our customers succeed financially, because when our customers succeed, so do we. We measure hundreds of things everyday at Wells Fargo. For example, how many checking accounts were opened, how many mortgages we originate, how many did we modify, how many assets do we have under management. But the most important thing we measure is revenue growth. We believe revenue growth is the best measure of how well we serve our customers. In 2009, we generated a record $89 billion in revenue, including fourth quarter revenue of $23 billion. This revenue growth was diverse with double-digit annualized linked-quarter growth in asset management, auto lending through Wachovia Dealer Services, merchant card, insurance, mortgage banking, and wealth management. With the merger, we see even more opportunities to grow. In addition, because of the financial crisis, we have never seen a better opportunity to grow market share and earn more of our existing customers’ business. Let me give you some examples of what we already have achieved. On average, retail bank household at legacy Wells Fargo now has 5.95 cross-sell of Wells Fargo products, up from 5.73 products just a year ago. Our market share in mortgage originations is 23%, up from 16% in 2008 and 10% in 2006. In auto lending, we are the number one used auto lender with a 6% market share, up from 4% a year ago. In 2009, we ranked number one in middle-market lending market share, establishing more new relationships during the year than any other financial institution. While these market share gains demonstrate how we have benefited from our strength in the marketplace, our goal has never been to get bigger for the sake of being number one. We always start at what is best for our customer and our shareholders. The share that matters the most to us is the share of our customer’s business. When a customer brings us more business, we can give them a better deal, they stay with us longer, they give us more opportunities to sell them more products and services, we know more about them and their financial needs, and we earn more profit per customer. As I look at the year ahead, there are many exciting things happening at Wells Fargo that we believe will benefit us for years to come. But as we’ve always said, our top priority will be meeting the financial needs of our consumer and business customers, helping them and Wells Fargo succeed financially. Now let me turn this over to our CFO, Howard Atkins, for more details on our fourth quarter results and I’ll be back with him at the end to take your questions. Howard?

Thanks, John. I’d like to cover four topics in the next 20 minutes or so and then John and I would be happy to open up the call for your questions. Four things I’d like to talk about; first, a quick recap of our fourth quarter results; secondly, I’ll give you our take on credit quality; third, I’d like to give you an update on Wachovia and how credit expenses, revenue synergies have performed compared to our acquisition model and integration objectives; and I’ll conclude with a few remarks about the strength of our balance sheet and our capital. So let me talk about the fourth quarter. Our results in the fourth quarter were a great ending to what we think was a pretty remarkable year. The $2.8 billion we earned in the fourth quarter capped a record annual profit of $12.3 billion. And the key to these results, as John says and as it has always been at Wells Fargo, is revenue, which reached a record $22.7 billion in the fourth quarter, up 4% annualized linked-quarter. Revenue growth at the company was solid across many of our diverse business lines, including wealth management, which had 21% revenue growth annualized linked-quarter; our investment banking business, up 25%; our insurance business, up 23%; and our auto business, up 14%. And you can see just how diverse that list of businesses is that had some strong revenue growth. Our mortgage business once again contributed to revenue growth with $94 billion in originations, very similar to the strong third quarter volume, and solid results in our mortgage servicing business. Hedging results in the mortgage business were strong again this quarter, and in fact could remain relatively high as long as short-term rates remain low and the hedge performs effectively. Our actual hedge results in any quarter, of course, will reflect how much of the servicing asset we hedge and the effectiveness of the particular instruments we used to hedge. Now we manage the mortgage business very holistically to achieve a target range of combined origination and servicing earnings within a reasonable range of interest rates. Our goal isn’t to try to maximize profits each quarter, nor do we try to eliminate all interest rate risk. The mortgage business itself naturally provides some countercyclical balance to our overall results, but that’s part of the value of our business model. At points in the business cyclical, less conducive to strong mortgage earnings, such as when the economy is strong or interest rates are higher, many of our other businesses contribute relatively more to our results in the mortgage business. To give you an example, in the current rate environment, we’ve kept our powder dry at our mortgage-backed securities portfolio despite the significant growth we’ve had in long duration core deposits all year on the possibility that today’s relatively low mortgage rates return to historically more normal levels. So if anything, we are giving up current carry income in our investment portfolio right now. Loan demand remains soft in the fourth quarter although we did see some demand emerge in the consumer loan portfolio. Total loan outstandings were down $17 billion, less than the $22 billion decline we had in the third quarter. The fourth quarter decline was due to $4.7 billion reduction in what we call non-strategic consumer loans, $2.4 billion reduction in non-strategic commercial real estate loans, and $5.4 billion of net charge-offs. What I’ll call the core or continuing consumer loan portfolio was actually flat in the fourth quarter, after declining every other quarter in 2009. On the commercial side, many of our commercial customers remained very liquid and line utilization on our $258 billion of revolving commercial commitments dropped again to about 35% compared to typical utilization rates in the 40s. Once the loan demand ticks up, we would expect to gain commercial lending market share because we already have the existing and extensive longstanding relationships with these customers. Our commercial customers’ liquidity also reflects typically their strong financial position, one of the reasons why we’ve experienced such low loss rates in our C&I portfolio. Expenses in the fourth quarter were up $1.1 billion from the third quarter, including $860 million of merger related and other incremental costs, including the previously disclosed $261 million expense provision for the auction rate security settlement. Apart from the auction rate securities settlement, the increase in expenses in Q4 breaks down into four sources. First, an expected increase in integration expenses before the end of 2009. Second, an increase in foreclosed asset expenses, which are likely to remain somewhat elevated for a while although not necessarily at fourth quarter levels. Third, a typical seasonal increase in expenses before year-end. And fourth, real reinvestment back into the business. We remain committed to tight expense discipline around everything we do while continuing to invest for the benefit of our customers for long-term revenue growth. Now let me turn to credit quality. Last quarter, if you remember, we said we expected consumer credit losses to peak in the first half of 2010 and commercial losses to peak in the second half of 2010, assuming no further economic deterioration. Based on the portfolio performance data we saw in the fourth quarter and assuming the same economic outlook, we are actually tracking somewhat better than those projections. The signs of a positive turn in credit are most evident in the consumer portfolio and the C&I portfolios. Let me hit consumer first. On the consumer side, 30-day delinquency balances were down, were stabilized in the fourth quarter in a number of portfolios, including personal credit management, credit card, auto, liquidating home equity portfolio, and small business direct. In addition, the more recent vintages have shown greatly improved credit performance across most of our consumer portfolios and loan rates for the Pick-A-Pay portfolio improved in the quarter, as they have for several quarters now, as you can see in more detail on page 33 in our quarterly supplement. Consumer non-accrual loan growth slowed in the quarter. All of the consumer non-accrual growth was in consumer real estate. The main reason for the growth in consumer real estate non-accruals was the volume of modifications we’ve done for homeowners and the foreclosure moratorium, both of which actually pushed out the time when loans can return to performing status while we dropped off non-accrual through the foreclosure and disposition process. Credit losses in almost all of the consumer portfolios declined or stabilized in the fourth quarter. Losses declined from the third quarter in the liquidating home equity portfolio, credit card, personal credit management, Wells Fargo Financial auto, and Wells Fargo Financial credit card portfolios. We believe that if these trends continue, losses in about half of our 13 consumer lending businesses would have already peaked and it is possible – emphasis on the word possible – that consumer losses in total may also have already peaked. But of course, another downturn in the economy and particularly any further increase in unemployment could stall a decline in losses or even reverse that trend. The commercial loan portfolio, we also saw some signs that credit quality may be improving. After growing $2.7 billion in the third quarter, commercial and commercial real estate non-accruals were up only half as much in the fourth quarter, and all of that for the most part is in commercial real estate, with C&I non-accruals actually dropping in the fourth quarter. So of course, all consumer and commercial loan types, virtually all of the non-accrual increase in the fourth quarter for the company was in real estate secured portfolios. C&I and CRE loss rates remained relatively low compared to the industry, reflecting our historically strong underwriting and the fact that we already took $7 billion of write-downs against Wachovia’s commercial real estate loans through purchase accounting when we close (inaudible). We remain comfortable with the mark we took on Wachovia’s impaired CRE portfolio. Losses in the C&I and lease financing portfolios representing about 60% of total commercial losses were down on a combined basis in the fourth quarter. Finally, due to improved levels of liquidity, we saw increased opportunities in the market to liquidate commercial and commercial real estate assets. Let me very briefly highlight our Pick-A-Pay portfolio and CRE portfolio, both of which are outlined in more detail in our credit supplement, and explain a little bit why we believe these particular portfolios should perform better than the industry. The $85 billion Pick-A-Pay portfolio continued to perform better than originally expected at the time of the merger, driven by 52,000 modifications we completed during 2009, reducing the average monthly payment by 25% with interest rate reductions were more than 200 basis points on average and principal forgiveness was about $2.6 billion. The re-default rate on our modified loans has been roughly half of the re-default rates for the industry option ARM modifications, as reported by the OCC. For all mods that were completed in 2009 that are at least six months old, the 60-day re-default rate is about 14%. The improved outlook for this portfolio has also been driven by stabilization in certain markets where we have significant exposures such as California. The percentage of first time delinquent loans has dropped for six consecutive months and the percent of first time delinquent loans in our impaired portfolio during the fourth quarter was the lowest since the first quarter of 2008. The increase in non-accruals in this portfolio was primarily due to foreclosure moratoriums and HAMP processing and the growth was accounted for fully in our loss projections. Losses in our commercial real estate portfolio increased $266 million from the third quarter and included $165 million in charge-offs from the purchased credit-impaired loans where the losses exceeded the specific nonaccretable difference established for the particular loans. We also released $93 million nonaccretable difference was associated with PCI loans that were paid in full or sold. Now, these releases did not reduce charge-offs, but were recorded in net interest income or non-interest income. During the past year, we have re-underwritten and put resolution plans in place for the majority of the non-strategic CRE portfolio and reduced outstandings by $2.9 billion. While a significant portion of this portfolio is challenging, we remain comfortable with the impairment we took at the time of the merger. We expect to take write-downs and have positive resolutions in this portfolio from time to time. Now, let me shift to Wachovia. Having just completed the first year of the merger integration, I’d like to summarize the impact of the merger from a financing perspective on our financial results, and let me start with credit. When we closed the merger with Wachovia, we identified roughly $94 billion of purchased credit-impaired loans and wrote them down by $37.2 billion through purchase accounting. That represented our best estimate of the losses in these portfolios over their remaining estimated lives and refer to that of course as a nonaccretable difference. During 2009, we refined our preliminary 12/31/08 purchase accounting write-downs to $41 billion, and now there will be no further refinements after 2009. The 2009 true-up was largely due to increase in the pool of loans we subjected to impairment as of 12/31/2008, not to any credit deterioration in this portfolio. Throughout 2009, we charged off PCI loans to this nonaccretable difference and released nonaccretable difference related to loans paid in full, sold, or reclassified to accretable yield for loans with improving cash flows. And at year-end 2009, the remaining nonaccretable difference was $22.9 billion. So net-net, we’ve charged off $17.7 billion of the original $41 million. Going forward, we will continue to record charge-offs of PCI loans against this $22.9 billion nonaccretable difference, which we remain comfortable that it reflects the remaining life-of-loan losses for the PCI loans. Now, any subsequent deterioration after 12/31/08 in the PCI portfolio was taken into account in our credit reserve bills during 2009. While there was some pooling capability in the consumer portfolios for changes in life-of-loan estimates against individual consumer loans, most purchased credit-impaired commercial loans need to be accounted for on an individual basis. As a result, $333 million of the 2009 reserve build was for additional PCI life-of-loan estimates, including $100 million in the fourth quarter. When we wrote down the $94 billion of impaired loans by $41 billion, we effectively marked those assets to a market yield based on the expected cash flows in the PCI portfolio. The resulting PCI portfolio therefore is actually generating income at this yield and will continue to generate income every year until the PCI portfolio of assets are disposed off. In 2009, we recorded $2.6 billion of yield income on this portfolio, including $610 million in the fourth quarter. That’s a yield if you do the math of roughly a 5% on the entire portfolio. At year-end 2009, the accretable balance was $14.6 billion, reflecting income we will record over the remaining life of these PCI loans. Now, as the portfolio ages, two factors can add to the yield and therefore to accrued income over time. First, our estimates of the life-of-loan losses may go down in some portfolios. In this case, we would record the improvement in income but only over the remaining life of the loans. Until we have a very high degree of confidence that the revised improvement is highly probable, we need to be judicious in terms of recording any improvement into income. And as I said, in any event, if we do, it’s recorded over the life of the loan. Of the increase in accretable yield from the $10.4 billion at the beginning of 2009 to $14.6 billion at year-end 2009, we recorded only $441 million related to improved life-of-loan loss estimates on the PCI portfolio. And again, that $441 million will be recorded over time in net income. As we gain confidence in any improved estimates from this point forward, this could represent a material source of income over time in the future, particularly in portfolios like the PCI Pick-A-Pay portfolio where we are beginning to see improvement, but so far the amount added to income from this particular factor has been negligible. The second and so far larger factor relates to improvements in cash flow projections, primarily relating to loan modifications. As we modify loans that have already been written down through purchase accounting, we improve future cash flows on the modified loans even after taking into account potential re-defaults. The bulk of the increase in the accretable yield from $10.4 billion to $14.6 billion at the end of 2009, represents additional income that we have not yet recorded but expect to record over time due to our improved payment expectations on our successfully modified PCI loans. We turn to expenses on the merger side, merger expenses and cost saves. We remain on track to achieve the $5 billion of annual run rate savings from the consolidation that we estimated at the time of the merger. We achieved approximately $2.9 billion of cost saves in 2009 and we expect to achieve the remaining integration saves when integration is completed by year-end 2011. We had originally estimated that we will spend $7.9 billion in integration costs cumulatively over the three years necessary to achieve these savings, but we now estimate we won’t need to spend more than $5 billion. That’s because we are seeing lower severance and retention costs, lower property disposition cost, and lower contractor and lender expenses than we originally thought. In 2009, we spent a total of $2.1 billion on integration, $1.2 billion of which went through goodwill under purchase accounting and $895 million was expensed to earnings. In the fourth quarter, $654 million was charged to goodwill and $450 million was expensed, up from $200 million in the third quarter, primarily because of an expected increase in business and systems integration projects and severance costs related to team member displacements. The severance cost expense in the fourth quarter related to exit plans for legacy Wells Fargo team members, whereas severance cost for legacy Wachovia team members under purchase accounting was charged to goodwill throughout 2009. Starting in 2010, all future integration costs will be expensed. And we expect the merger savings we realize in 2010 to largely offset the 2010 estimated merger integration expenses. As we have spent this money so far this past year, we accomplished a great deal of business and system integration. We completed the re-branding at our brokerage capital markets mortgage and insurance businesses. We successfully converted our first banking state Colorado and our five remaining overlap states will be converted in 2010. In addition, we worked on integrating technology platforms throughout our banking stores that laid the groundwork for the systems conversions that will take place over the next two years. Replaced over 500 Wachovia ATMs and Envelope-Free ATMs throughout our banking space. Our ATM network, which has been available to both Wells Fargo and Wachovia customers throughout the year, processed over 5 million cross-company transactions in 2009. The average legacy Wells Fargo retail banking store serves roughly 20% more households than the average Wachovia store, but has 70% more platform bankers serving customers. During 2009, we hired and shifted more than 1,250 additional platform banker FTEs to serve customers in legacy Wachovia stores. And we expect this will further align the Wachovia stores to the banking model used by Wells Fargo and help drive cross-sell. We plan to continue to add bankers in 2010. When we priced the Wachovia merger, we did not assume any revenue synergies, but we have already begun to realize tremendous synergies across our businesses. Let me give you a couple of examples. Our mortgage market share is usually higher in states where we have a banking presence, and we have already realized market share gains in the Wachovia banking states. Before the merger a year ago, we ranked number one in eight Wachovia banking states where Wells Fargo did not have banking stores, and we currently rank number one in a total of ten Wachovia banking states and number two or number three in the remaining banking states. Our international group is one of the largest providers of foreign exchange services, transacting more than $4 trillion in notional trade volume each year. Prior to the merger, Wells Fargo and Wachovia were both big in international banking, but in combination, the company has a broader set of products and services to offer more customers, with offices in more than 35 overseas locations, and serving customers in more than 130 countries. We are now the third largest trade processor for other banks that do business overseas, processing more than 65,000 payments a day and $36 trillion a year. Another example, investment banking and sales and trading activities, which had strong revenue growth throughout 2009, as we combine Wachovia’s origination and distribution with the client relationships both banks had, resulting in market share gains for Wells Fargo. We now rank number four in loan syndications and number six in total equity. Additionally, we were book runner or lead manager in over 50% of the deals we participated in during 2009. As we continue serving the capital raising and advisory needs of our middle market, large corporate and municipal customers, along with the product needs of our institutional and retail investing customers, we expect to increase our share of the customer flow portion of the investment banking business. We have actively reduced the risk associated with Wachovia’s highest risk loans and securities portfolios. For example, since year-end 2008, through pay-downs, charge-offs and sales, we’ve reduced the size of our non-strategic consumer loans, including Pick-A-Pay, indirect home equity, indirect auto, in total by almost $19 billion or 15%. We reduced the size of these loans by $4.7 billion in just the fourth quarter. We would expect to continue to see the size of this portfolio shrink in the future. In addition, we reduced the size of the non-strategic commercial real estate portfolio by $2.9 billion in 2009. On the other side of the balance sheet, Wachovia had $136 billion of high rate CDs on their balance sheet at the end of last year – that's the end of 2008. In 2009, $109 billion of those matured, including $14 billion in the fourth quarter. 57% of these deposits were retained in lower cost checking, savings and CDs. $8 billion of Wachovia’s high rate CDs, largely the balance of the original amount, will mature in 2010. We’ve had great success from deposits across the company this year, with average checking and savings account balances increasing 20% annualized linked-quarter. Let me conclude with a few remarks about our strong balance sheet and capital position. With loans down $82 billion and core deposits up $35 billion this past year, we are more liquid than we have ever been and have significant capacity to extend credit without having to increase leverage, because we already have the liquidity on the company’s balance sheet. Our mix of deposits has improved with lower rate checking and savings deposits now accounting for 87% of total core deposits, up from 76% at year-end 2008. Since we hardly issued any term debt under the FDIC guaranteed debt programs last year, unlike many of our large peers, and since we had previously lengthened our debt maturities, we only have about $20 billion of holding company debt maturing in any of the next three years. That’s roughly half the maturities per year of our three largest peer banks, leaving us in a much more flexible financing position. We also have significant capacity to add to our securities portfolio, as I mentioned before, should long-term yields increase. Our approach in securities has always been to keep our loan duration MBS portfolio roughly in line with our large and growing base of longer duration core deposits and to invest when long-term yields are high, not when the carry trade looks good. In effect, we are currently giving up current income to preserve the flexibility to add to the portfolio at higher rates for even more income going forward. Of course, should interest rates fall, the unrealized gain in our bond portfolio already nearly $5 billion at today’s interest rates and spreads should go up. And of course, in that particular interest rate environment, the mortgage business would likely have even better economics. We built credit reserves by $3.5 billion in 2009, including $500 million in the fourth quarter. The allowance for credit losses now totals $25 billion, six times what it was at the start of the credit crisis and reaching 3.2% of loans. While 3.2% is below some of our large peers, there is a reason for that. We believe we have a better underwritten loan portfolio. And in addition to the reported reserves, as you know, we also provided $40.9 billion through purchase accounting for the life-of-loan losses in our purchased credit-impaired portfolio, of which $22.9 billion remains. With respect to capital, legacy Wells Fargo always maintained industry-leading capital ratios and we also maintained a capital structure largely independent of hybrids and structured capital unlike many of our peers. With our strong internal capital generation and the actions we have taken to issue common equity, our capital ratios are now higher than they were prior to the Wachovia acquisition, even after repaying TARP in full and buying PRU's share of the retail securities brokerage business. So we are ending 2009 with a customer base and geographic reach at least double what it was a year ago prior to the merger, with all the financial resources in place to properly serve that larger base of customers for future revenue, earnings and capital generation. And with that, I’d like to now open up the call for your questions.

(Operator instructions) Your first question comes from the line of Matt O'Connor. Matt O'Connor – Deutsche Bank Securities: Good morning.

Good morning.

Good morning, Matt. Matt O'Connor – Deutsche Bank Securities: First question is on the mortgage business. And I guess I always think about two pieces, the core business, which seems to be doing well and the pipeline strong heading into 1Q, and then the hedging part of it. And if I recall, I think you basically said as long as the yield curve stays steep and you keep the current hedge on, we can expect continued hedge gains. And I guess I just want to circle back on that if we can expect additional gains going forward.

First I’d like to say, as I mentioned before, we do manage this very holistically. So separating the products is not necessarily the best way to looking at the business in terms of how we manage the hedge. But the – as I said, if short-term rates remain low and you can make up your own – you have your own forecast about that, that does contribute to the run rate earnings on the hedge. And finally, this is a very dynamic process. We adjust the hedge daily. As you would expect, this is a very big portfolio and should our views on rates change and our estimates on what rate changes may do to both sides of the business change, we could very well decide the amount that we hedge. So – a complicated answer, but this is very dynamic. Short-term rates should remain low for a while. Net-net, that should be a plus to the profitability of the business. Matt O'Connor – Deutsche Bank Securities: Okay. And then separately, with you acquiring the remaining stake of Prudential joint venture, the earnings stream, I assume, kicks in this quarter?

Yes, that is correct, Matt.

So we have 100% of the earnings of the business now. Matt O'Connor – Deutsche Bank Securities: And remind us what the annual pickup in earnings will be from that.

We haven’t disclosed that amount. It will be what it will be. Matt O'Connor – Deutsche Bank Securities: Okay.

But their interest is about 23% of the business. And all the earnings plus all the cross-sell and so forth accrues to our shareholder. Matt O'Connor – Deutsche Bank Securities: Okay. Thank you.

Thank you, Matt.

(Operator instructions) Your next question comes from the line of Nancy Bush. Nancy Bush – NAB Research: Quick question here on capital markets. Given the resurgence of the Glass-Steagall arguments, could you just speak to sort of the breadth of your capital markets operations here? And if indeed you ever had to split them off, would it be a big loss?

Good morning, Nancy. This is John. With the merger of Wachovia, we are a much larger commercial bank. And one of the great assets we got as part of the merger was a terrific team of folks from Wachovia in investment banking business. I view this as additional product, a way for us to add service to those customers who are already doing business with. Some of the proposals that I have seen, and who knows what’s going happen, about going back to the future or splitting something off or requiring additional capital tends to be for those riskier parts of the investment banking business, proprietary kinds of lending, structured activity, I’ve not heard much about splitting the baby around the so-called flow business, which we think is where we can add value to our customers. But who knows what’s going to happen, but I don’t – whatever happens surely would have a smaller impact in this company than our peer group. Nancy Bush – NAB Research: Could you just remind us what parts of the capital markets businesses basically have been downsized or shut down since you took them over from Wachovia?

Yes, they had activities that did not, for the most part, start with customers and relationships. And most of the things that we kept and are actually growing and developing start with the customer. And it’s customer-focused. Yes, but didn’t have that, just started with the customer, we’ve tended to not grow that or actually shrink that or get out of some of those businesses. Nancy Bush – NAB Research: Okay. And just as a final question, could you just update us, John? I mean, we’ve seen all the numbers for the Wachovia integration, but what has actually started to happen at the Wachovia branch level as far as cross-selling products, et cetera, because here in New Jersey it’s sort of not really visible yet?

Yes. Well, it will be coming to New Jersey. Every day we get one day closer to that. As I think Howard mentioned, I think you know, this process will likely take us three years, give or take. The first year we spent a lot of time on the plumbing and wiring, getting teams in place, and we did do one overlapping market. Those are the one you need to do first because you have Wachovia and Wells’ customers most doing retail business in the same market. So – and we are going to finish the rest of the overlapping early – or during this year, and we will get to some of the eastern markets later this year and then you will see the big push from a signage perspective in the east later this year and next year. But even before that, we have – we are increasing the number of bankers in the stores. We are learning from each other about great sales and great service. But I think the notice will change, as we probably will come to New Jersey. You will see more of that at the time of the actual changeover. Nancy Bush – NAB Research: And there is no pressure at this point to – you know, given the sort of competitive nature of the business to accelerate that sort of cross-selling timeframe et cetera?

Well, actually, Nancy, I looked at our numbers for the fourth quarter and I am more than pleasantly -- in fact I’m thrilled about how the quality of our – of the folks on the East, if you will, legacy Wachovia and the proficiency of their cross-sell and their selling, they are coming from a lower sales base largely because they have not enough bankers in their stores. But if you take sales per banker, I am thrilled with what we are seeing. So – and we have more opportunity there because the holding – the product holdings by those retail households is less than what it is on the Wells’ side, it's a huge opportunity. And that’s only one part of the business. I mean, we’ve – on the middle market and the wholesale side, there is a lots of terrific things happening in the East, but I know people tend to focus when you think about stores on the retail side. Nancy Bush – NAB Research: Okay. Thank you.

Thank you.

Your next question comes from the line of Betsy Graseck. Betsy Graseck – Morgan Stanley: Hi, good morning.

Good morning.

Hi, Betsy. Betsy Graseck – Morgan Stanley: Hi. Couple of questions. One is on capital and obviously you did raise capital, got out of TARP last quarter. Could you just give us a sense as to how much credit you’ve got? You think you got from the regulators in the losses that you had booked upfront with the WB transaction. In other words, did you get credit for those losses in the calculation in your opinion?

I’d say it this way, Betsy. We know, as we look at our own balance sheet and capital, that typically we have less risk than many of our large peer banks. And one of the areas we have less risk is because we’ve already taken the hit on the PCI portfolio when we did the merger. That concept does form the basis of how we talk to the world, including regulators, about our company and how much capital we need as an organization. So I can’t tell you whether any specific numerical amount was taken into account, but the fact that we have so de-risked, we've taken so much risk out of the Wachovia portfolio, certainly in our view, and we believe in the people we talk to, it does form part of the basis of how much capital is adequate for this company. Betsy Graseck – Morgan Stanley: Okay. And then as you outlined, at the margin credits getting less bad because of some better than initially affected outcomes in some of the portfolios, right, that you bought from WB, could you give us a sense as to how you are thinking about capital generation and reallocation? I mean, what kind of trigger points do you need to see to either reinvest more aggressively or to distribute capital to shareholders?

Well, I would – Betsy, I’d say it this way. This company has had a long history of growing capital organically, which is always the best way. And as we look at capital – the first calling capital in my mind is to grow the business and fortify the balance sheet, and then we surely want to distribute “excess capital” to our shareholders. Dividends is one way to do that. One of the toughest decisions we had to make last year was cutting our dividend. We surely want to get back to a more appropriate dividend level as soon as practical. Of course, that’s a decision that is with the Board, and I’m sure they are going to want to see or at least consider and take into their consideration a turn in the economy or some positive signs and so forth. But as you look at capital, as Howard mentioned, I think you need to look at the risk of the organization, we have – we are not in a lot of the risk businesses. We don’t have big trading account and so forth. This is a community-oriented, customer-focused kind of business that we do. And also we are not naïve to what other levels of capital are around the world frankly. And so we will just see how things go, but we are comfortable with our capital position and we’re surely comfortable with the way we’re growing capital today. Betsy Graseck – Morgan Stanley: Okay. I mean, obviously you’ve got some proposals out from Basel at the end of the year. How much – have you taken a look at those? And is there any – maybe you would do differently with the business model based on what’s being proposed?

Yes. That’s very preliminary.

That’s 2012 and –

Obviously, we take a look at all those stuff, but it would be highly speculative to even comment on that. Betsy Graseck – Morgan Stanley: Okay. And then just lastly on the bank tax that’s been suggested, is this something that you would just pass through to shareholders or do you think that there is any ways that you could potentially offset some of those?

Let me answer it this way. First of all, we were invited in the TARP. We’ve repaid our TARP. It’s been a very good return to the Treasury and the taxpayer. In addition to that, we have made more loans, and we have not only paid it back, we’ve also honored the spirit of the investment to make loans to help the economy going. And as I talked with our shareholders, other people who are interested in our company, team members, customers, our stakeholders, they are talking to me about jobs. And I don’t understand how additional taxes or a fee disguised as tax at this time helps with growing jobs. Betsy Graseck – Morgan Stanley: Okay. Thank you.

(Operator instructions) And you do have a question from the line of Paul Miller. Paul Miller – FBR Capital Markets: Yes. Thank you very much. We’ve seen the housing markets starting to stabilize here and we do know there is a lot of government programs, the government buying mortgage-backed securities in the FHA program, which you saw today that they are going to up some of the down payment and fees on lower FICO scores. How do you think – I mean, how much – we know the government is supporting the housing market, but how stable do you think it really is? And how much pullback can the government do to keep this market where it is today?

Paul, I – I don’t know. All I know is that all rates have benefited consumers, as we have helped them last year refinance or modify 1.5 million homeowners. And I think your guess is probably as good as mine as what the government might or might not do with respect to supporting housing especially on the long end by buying mortgages. So customers are still buying homes. They are still refinancing. They have needs. We are there serving them and we will serve them whether the rates are little higher or lower, whether the government is more involved or less involved. It is fairly dynamic right now.

Operator, any other questions? If not, perhaps we’ll just conclude the call.

(Operator instructions) And you do have a question from the line of Andrew Marquardt. Andrew, please state your question. Andrew Marquardt – Macquarie Research Equities: Hi, guys. Can you hear me?

Yes. Hi, Andrew.

Hi, Andrew. Andrew Marquardt – Macquarie Research Equities: Can you guys go back to your credit quality comments talking about 2010, expecting to see peak credit losses with consumer first in the first half and then commercial in the back half? Can you elaborate a little bit about that as well as maybe give some color in terms of will provision costs correlate with those peakings or should we also expect some reserve build to continue?

Well, again, as we said last quarter, consumer early in the year, commercial later in the year. I guess, the only slight nuance we’d say is that where we see things peaking a little bit later rather than a little bit earlier, it would be more in the real estate secured portfolios, consumer and commercial rather than the other portfolios. The C&I portfolio, for example, is actually in very good shape right now. As I indicated, non-accruals are down and losses are remaining pretty low. And we are seeing peaking already in a number of the other consumer portfolios. Reserve build is a tougher question to answer. Obviously we don’t provide guidance around that. Obviously we think that the allowance that we had at the end of the year was adequate for the portfolio. But again, this is dynamic. A lot is going to depend on which particular quarter things peak, what the trajectory is after the peak on the way down, so on and so forth. So we feel comfortable with the allowance. We’ll have to see each quarter as we go forward. Andrew Marquardt – Macquarie Research Equities: Is it fair to assume that on the commercial side as NPAs continue to rise or kind of problem assets internally rated, downgraded that reserve build really should continue?

Well, again, if you – the point is that commercial real estate peaks a little later and consumer a little earlier. Obviously on the commercial side, that in isolation keeps some pressure on reserving. On the other side, the consumer goes the other way. So really it’s going to depend on how each of these portfolios plays out quarter-by-quarter going forward. Andrew Marquardt – Macquarie Research Equities: Okay. Thanks. And then my second and last question was on the accretable yield balance. I think it’s now $14.6 billion. You mentioned that’s going to be realized over the remaining life of the loans. Can you give a sense of how long that might be and if we should really expect – I think you should it was – the quarterly impact this quarter was $6.10 billion. Is that what we should kind of think about as a run rate or how do we think about that playing out? Thanks.

Well, again, most of the – I don’t want to say it. Most of the 6.10 in the quarter or the sort of $2 billion-plus that we recorded in 2009 is in fact the yield on that portfolio. So most of that does carry forward for a period of time. Obviously the portfolio matures, things get (inaudible) in the portfolio, and we can add to that as we continue to improve – if we continue to improve our estimates of the future losses and continue to modify loans. But – so a fair chunk of that is kind of run rate in nature, given the qualifications I just gave you. And as to the remaining life, as you would expect, Andrew, there are portfolios in the total PCI portfolio, which mature over a variety of timeframes. Of course, the big piece of that is the Pick-A-Pay portfolio and that has a relatively longer duration. Andrew Marquardt – Macquarie Research Equities: Thank you.

Your next question comes from the line of Ron Mandel [ph].

Hi. Yes. I –

Ron, we can’t hear you.

Your next question comes from the line of Betsy Graseck. Betsy Graseck – Morgan Stanley: Hey, just a follow-up question on rates, I just wanted to understand, Howard, how you’re thinking about the impact of the Fed exit on the fixed income market and how you’re planning on managing the balance sheet for that.

Well, that’s a good question, Betsy. And the Fed obviously is active in buying MBSs. And despite the fact that the yield curve is as positively sloped as it right now, their active purchases is a factor that is in some senses artificially keeping long MBS yields lower than they might otherwise be. At some point, presumably they will either gradually or more quickly reverse course and that could lead to an increase in interest rates. And as I mentioned a couple of times in my remarks, in possible preparation for that, we have been keeping our powder dry in effect under-investing this large base of core deposits that we have for the possibility that that reverses course. Betsy Graseck – Morgan Stanley: So you might get some OCI [ph] hit near-term, but dry powder leads you to a better outlook for earnings. Is that the way to think about it?

Yes. Again, while the mortgage business is showing good results right now, in effect on the portfolio side, the investment portfolio, we in effect are giving up some current income. We don’t believe in the carry trade, and we do want to preserve some powder in case rates do go up and we will have the powder at that point where we will invest the powder at that point to offset some – whatever is going on in the mortgage business.

Betsy, actually this as the classic short-term view of the business or long-term view of the business. 400 basis points or something like that, which we make in the carry trade today, is very attractive. But we think it’s the wrong decision long-term because we think the bias is for higher rates, not for lower rates, and we’re willing to wait for that to happen. We think that’s the better trade.

But rather than believing the point, we are effectively giving up 400 basis points today for possibly a year or so, maybe plus or minus, to avoid the potential risk of a large number of basis points for 30 years. So the last thing we want to do is get stuck with –

Correct.

– with the securities at these low levels of interest rates.

Because – I think when rates move, they are probably going to move at some speed and I don’t think there is going to be maybe a quarter. It could be – it could be more than that and it could happen relatively quickly.

Also, Betsy, this is the same thing that we did back in 2002, 2003, when interest rates were also at cyclical low points just before they went up a lot. So this is – what we’re doing now is not very different from the way the company has always managed itself. Betsy Graseck – Morgan Stanley: Okay. That’s good color. Thanks.

Your next question comes from the line of John McDonald. John McDonald – Sanford Bernstein: Hey, guys. A question on the mortgage business. I was wondering how much the expense base of your mortgage business is variable and gives you flexibility to manage the slowdown in originations.

I don’t have a precise ratio for you, John. But as you know, we manage the mortgage business with a reasonably high content of variable expense. And we do that by design. The mortgage – the people manage our mortgage business have been in this business for the last five cycles, 20 years plus. And we know there is a cycle to the mortgage business. And as a result, we try to keep the expense base of the business as variable as we can keep it. And as you know, the way we’ve done that in the past is when we start seeing applications rise quickly, typically we are adding part timers and peak timers rather than full-time staff, and that gives the ability to move the other way if production slows down.

And John, you know, all of the producers are on commissions. So that’s all variable. John McDonald – Sanford Bernstein: All right. All right. Okay. And again, on the servicing side, don’t need a number, but just a feel for things. Are the servicing margins getting hit now by the high cost of servicing, modifications, collections? Is that a meaningful impact on your servicing margins at this point?

It is an expense, John. I wouldn’t call it necessarily meaningful, but what’s meaningful is if we have devoted significant resources to the modification process. We have 15,000 people now dedicated to doing that. That’s the right thing to do for the customer. We want to keep the customer in the home, and we want to work through all this. And I’d also say finally, we factor any of the costs that we incur in this business are in fact factored into our MSR. John McDonald – Sanford Bernstein: Okay. And then just on NII, just your high-level thoughts on growth or shrinkage in the balance sheet, given the challenge of finding loan demand, your cautious stance about securities and then the run-off portfolio, is that a big challenge to find growth in the balance sheet as you look out over the next year or two?

John, I would – we've been dealing with that for some time now. And if you look at 2009, we’ve had a lot of challenges and we have – we are hiring more people. There are more feet in the street. We are doing a double look on loans that we turn down to make sure that we’re turning them down for the right reason. And I think that will be a challenge for the industry in 2010 until economy turns around. Now with respect to Wells uniquely, our business model, the fact we have 80-some different horses pulling the coach and that we have such great balance between where our revenue comes from, half from non-interest income, the other half from net interest income, and the geographic diversity we have and some of the new businesses that we are in that we have – we are still sub-optimized we can grow. But I am not saying this can be easy, but we surely – we believe we can outperform on a relative basis in that area. John McDonald – Sanford Bernstein: Okay. And just one final follow-up on that, Howard. Could you just give us a couple sense of the puts and takes on the net interest margin factors that will – positive and negative that kind of influence the outlook on margin as we look ahead.

Well, there is lots of puts and takes, including growth in the left hand side of the balance sheet and growth in the right hand side of the balance sheet. Interesting phenomenon in the fourth quarter, we did tick down a couple of BPs in the margin. But interestingly, that in effect was because we had such good deposit growth in the quarter in combination with the loans that were coming off. So the – because of the large deposit growth, the size of the asset base actually remained relatively constant even as loans were declining and that actually diluted the margin a little bit. So that’s just one fact. I think two – I guess my two important points on the margin would be, one, we should continue to have a higher margin than the other big banks in the country because we have such an incredible deposit base. As I mentioned, 87% of our deposits are now in low-cost checking and savings. And that’s growing rather than shrinking. So that’s a good factor. And secondly, as I said before, there's lots of factors going up and down. If loan demand reemerges, we may see a decline in the margin, but that would be good for income. So our focus here is really on net interest income per se, not the margin per se. John McDonald – Sanford Bernstein: Okay. And again, the reason the deposit growth in the fourth quarter was just that you invested it in low-yielding liquid stuff?

In fact, not by design, but basically the combination of loans coming down a little bit. Normally if loans come down and your deposits are shrinking, you may not actually get a diminution in the margin. But if your loans are coming down and your deposits are growing, the incremental asset – your assets are not shrinking even though your loan income is going down. So you get a little bit of a diminution in the margin as a result. John McDonald – Sanford Bernstein: Okay. Got it. Thanks.

Your next question comes from the line of Joe Morford. Joe Morford – RBC Capital Markets: Thanks. Good morning, John and Howard.

Hi, Joe. Joe Morford – RBC Capital Markets: Couple things. First, just following up on Nancy’s question, given the three-year timeframe you talked about for the integration, when can we expect to see the gap narrow between the two companies, retail household cross-sell ratios? And separately, maybe you can talk a bit more about some of the cross-sell progress on the wholesale side?

I think we’ve mentioned that the – in our release, that the difference is on the legacy Wells side, it is 5.95. On the Wachovia side, it’s 4.70, in that range. So there is a delta. It doesn’t sound like a lot, but you multiply that times 11 million or 12 million households, it’s a lot of products. I can’t give you an exact timeframe as to when that will close, but the way you close it is by adding more people to the Wachovia stores and frankly sharing ideas and working together as one team. So that will close. I think the more interesting thing is, on the Wells side, we are not stopping. In fact, our cross-sell is actually accelerating. We went from 5.73 to 5.95 on the retail side. We grew by almost a quarter of a product per household over the whole fleet in one year, which is tremendous. And that’s because of the great service that we’re providing in the stores. On the commercial side, if you look at the legacy Wachovia business in the middle market, it’s all – you know, that business we like a lot and we are making good progress there in fact. The wholesale side happens to be the cross-sell champions in the company. So we have a new business model on the East in place this quarter. We are seeing good progress. We are working together with each other. So, of all the things I worry about, that’s about the last one. There is great – there are cards and letters going back and forth between the company and each other of how to improve in this area and we’re winning every day. Joe Morford – RBC Capital Markets: Okay, thanks. And then at this point, do you have much interest in pursuing smaller FDIC-assisted transactions to fill in your franchise? And if so, what markets are of the highest priority or interest to you?

The highest priority I have right now is do Wachovia really, really well. And it – I never say never to anything. But you’ve seen we’ve done nothing this past year on the banking side. And frankly, when we put – when we get this all done, we will have, I believe, the best franchise with more stores in the biggest economy in the world, not to be replicated, it’s just that unique. Are there couple places that we would like something more? Sure. But I view those as – of the top 20 MSAs in the country, we are number one in ten of those. So we have dominant share, and I’ll worry about that sometime later, but all hands are on deck getting Wachovia done really, really well. Joe Morford – RBC Capital Markets: Okay. Thanks, John.

All right. We are going to be – is there –

Ladies and gentlemen, this concludes today’s Q&A portion of today’s conference call. I will now turn the call back over to management for closing remarks.

I want to thank everybody for joining us today. I appreciate your interest in our company, and we will see you in 90 days from now. Thank you much.

Thank you, everyone.

Ladies and gentlemen, this concludes today’s Wells Fargo fourth quarter earnings conference call. You may now disconnect.